Hey, small business owner – congratulations on doing so well that you’re ready to start employing staff. That’s an epic milestone which ought to be celebrated! Before the fun and games can commence, here’s what to do before taking on staff for the first time.
Can I afford to take on staff?
Before you hire anyone, talk to your accountant! Go through the numbers, right down to the smallest decimal, to pinpoint what is reasonably affordable to you right now. Your recruitment wish list might feature somebody with decades of experience and a contact list as long as their arm. Just remember that those people usually comes with a high price tag, and your business might not even be ready for them just yet.
As an employer, your business finances also need to accommodate more than just the employee’s salary, too. Don’t forget to consider things like:
You’ll need to keep HMRC in the loop about your change of status from business owner to employer. Register as an employer up to four weeks before you actually pay your new recruit. It then becomes your full responsibility to make the appropriate PAYE deductions and pay them on to HMRC.
First-time employer 101 – make sure you’ve got some good Employer’s Liability insurance sorted before you even think about setting somebody up with a desk. Employer’s Liability insurance is required to cover you for at least £5 million although most reputable providers extend this to £10 million.
Do all the necessary checks on your new recruit
The first check to carry out before hiring anybody is their right to work in the UK. You could end up with a hefty £20,000 fine if you fail to check that your new recruit is eligible to work in the UK.
Depending on the nature of the role you might also want to carry out:
Disclosure and Barring Service (DBS) check, which provides information if the candidate has an existing criminal record. You will be eligible to apply for a more detailed DBS check if the role is in a sensitive sector such as child services or healthcare.
Health checks to ensure your new employee is in fine fettle. You are only able to request a health check on a new recruit if it’s a legal requirement for the role (e.g. eyesight for driving), or if your insurers require it.
Our team of friendly online accountants and payroll clerks are on hand to guide you with your new payroll needs. Call 020 3355 4047, email email@example.com, or get an instant quote online for outsourcing your payroll.
About The Author
AAT Level 3 qualified, I specialise in providing payroll functions and services for a wide variety of clients and businesses.